What About Creating A Digital Transmission Right

from the a-look-at-the-lincoff-proposal dept

Bennett Lincoff has been proposing a different kind of solution to the music industry's online woes for quite some time. Last year, he did a great job picking apart some of the major problems with Jim Griffin's Choruss plan (which, again, we've been told was supposed to launch in January, but we're still unfamiliar with any universities -- let alone the tens of thousands of students -- who have signed up for it). However, we haven't really looked at Lincoff's own proposal.

Reader SteelWolf sent in a copy of Lincoff's proposal that was sent to the Canadian government during its open copyright consultation last year. On the whole -- of the various proposals out there, Lincoff's might be classified as one of the "least bad" solutions, but that's a lot different than it being a good proposal.

The basic idea of the proposal is that a new right would need to be created under copyright law, the digital transmission right, that would replace the mishmash of copyright rights that currently cover online music (generally reproduction, distribution and performance rights). Basically, this transmission right would cover any and all music transmissions online and any license fee would be paid by the transmitter, not the transmittee. Thus, anyone could download or stream any music they want on their computer with no penalties at all and no need to secure a license. However, you would not then be able to share (transmit) that same music to someone else without a license. But this wouldn't matter so much (the theory goes), because a large service provider could pay for the transmission rights, absolving the individuals. In other words, with such a system, in theory, The Pirate Bay or a Napster could pay the transmission rights, and users would be free to both download and upload via those services. The theory is, of course, that it would be worthwhile for those sites to pay because they would get many other benefits from all the users flocking to them for sharing:

This "digital transmission right" would be a new right, not an additional right. It would replace the parties' now-existing reproduction, public performance and distribution rights (and, where applicable, the making available right and the right of communication to the public). These would no longer have separate or independent existence for purposes of digital transmissions of sound recordings or the musical works embodied in them.

The only act that would require a license, or payment of a license fee, would be the digital transmission of recorded music. Every transmission that is not subject to exemption would require authorization. This does not mean that separate payment would be due for each transmission of each recording; only that, regardless how license fees may be calculated, all non-exempt transmissions would require authorization.

Licenses would be made available unconstrained by the concerns that have driven the industry's failed campaign to salvage its sales-based revenue model. The determinative consideration would be whether or not recordings had been digitally transmitted, not whether transmissions result in sales, promote sales, or cause sales of recordings to be lost.

Licenses would be issued without regard to whether recordings are streamed, downloaded, or transmitted by some means not yet devised; whether music programming is interactive or non-interactive, or contains this, that or another recording; whether the service accepts user-generated content, operates as a P2P or social network, or otherwise retransmits or further transmits recordings that originate from other sites or services. The number of copies necessary to effect transmissions and the type of transmission technology used would not affect the availability of a license.

There are a lot of other details, and Lincoff has clearly put a lot of thought into the proposal and tried to cover many of the bases that people would likely critique. Compared to our current system, it certainly sounds like it makes more sense. He definitely does an excellent job describing that the only real problem is one of the industry's own making in still thinking entirely in the context of the old way that music was "sold." But the proposal still has a variety of problems. First, it's incredibly complex and not easy to understand. This is, of course, also true with existing copyright law. But replacing one super complex system with another one isn't necessarily a great thing either -- especially if that level of complexity isn't needed.

Second -- and this is my really big problem with it -- is that it still involves a huge and totally unnecessary bureaucratic nightmare in the middle that represents tremendous economic and societal waste in terms of managing the licenses, monitoring the usage and the transmissions of content and collecting and distributing the money. It's bureaucracy that isn't needed. We're already seeing over and over and over again that if you take out the unnecessary bureaucracy, artists can create business models that are much more direct, whether directly between the artist and the fan who wants to buy something or between an organization representing the artist. This is a much more efficient system, whereby there are plenty of opportunities to pay artists for various scarcities, rather than making up a totally unnecessary license for an abundant good which the market has already decided should be priced at zero.

As soon as you set up this bureaucratic structure, what really happens is that much of the money that could have gone directly to the artists (or to the artists' business partners) goes instead into the massive overhead required to keep the "collection society" working in the middle. This isn't a solution that helps musicians. It's a solution that helps bureaucratic middlemen.

As SteelWolf notes in his submission:

Personally I find these kinds of plans to be dangerous as they promote the idea that there is some kind of a "solution" that allows content creators to retain control over digital files as they propagate across the internet. These are not solutions, they are handwaving to obscure the fact that the economy has changed so that absolute control over content is neither possible nor necessary. The voluntary aspect of licensing promotes the idea that negotiating uses and fees with rights-holders is somehow the "morally correct" way to proceed, never once considering the idea that our culture may have moved beyond that construct.

* Take and absorb risks
* Move and concentrate capital to where it can be used
* Provide specialized services that cannot be easily provided by endpoints
* Aggregate opportunities
* Market and advertise goods

Google is the ultimate middleman. They don't produce much content of note. They make most of their money advertising things they don't make and don't sell. They contribute nothing, apparently.

You may insist that marketing is wholly unnecessary, but it exists for a reason, and it works. A consumer's experience of a product is fundamentally changed through marketing. Chemically-identical food in a more attractive container tastes better.

People on this site have a funny attitude toward middlemen that are primarily aggregators. When Google uses its aggregation power to marginalize content creators in exchange for some traffic, that's a good thing - that's the free market at work and it should be celebrated. When a record company takes risks for a band, advertises, funds the production of their records, and basically sells them fame in exchange for copyrights on their recorded music, they're an evil greedy middleman that must be stopped.

Re: Re:

"It's amazing how many 'free market' advocates want to enshrine their favorite business model in the law of the land."

I agree, we need to create a fee for every LED light sold and pay it to the old edison style light bulb companies. We need to get the edison buld companies to pay a fee to the candle makers. We need the candle makers to pay a fee to the torch makers. I mean what is this world coming to if companies are allowed to fail. ...

... so lets impose a fee on the monkeys and pay it to the dinosaurs or their descendants.

Re:

WE DON'T NEED MIDDLEMEN. THEY CONTRIBUTE NOTHING.

What a small and angry worldview this is. "Middlemen" of all sorts:

* Take and absorb risks
* Move and concentrate capital to where it can be used
* Provide specialized services that cannot be easily provided by endpoints
* Aggregate opportunities
* Market and advertise goods

It is true that middlemen do provide useful services - however that doesn't mean that we should accede the their lobbying for monopoly rights.

Google is (arguably) a middleman and has managed to make a lot of money without holding any monopoly rights.

However the existence of monopoly rights tends to attract a certain kind of middleman, and once they get established they try to increase the scope of the monopoly forever.

This is totally pointless because it relies on the same idea (ability to control/monitor distribution of media) that traditional royalties rely on and does nothing to address the fact that that model is fundamentally broken on the Internet.

If this could work, then so could any of the traditional royalty collection models.

The ISP would keep track of content distribution and pay a fee accordingly. This fee would, of course, be passed on to the customer. What is not clear is how this fee would be accessed upon the customers. For example, Ma & Pa Kettle use the internets for email and pictures of their grandkids, would they be accessed a rate as though they had distributed the latest eminem album?

This proposal looks like another collection agency similar to ASSCAP & BMI. These people do not care whether you play music from an unaffiliated artist, they demand payment because you might play their stuff by mistake. I can imagine how this will play out with the proposed collection agency. This would become a content industry subsidy and I'm sure that many people would not be happy about it. Would my contribution to the content industry subsidy be tax deductible? Would the content industry levy be directy proportional to the connection speed?

Obviously this guy is not an Author/Songwriter/Composer. The old business model still works for us. We still do performances and still sell CD's at those performances, at stores and other venues. The old business model is not flawed. This a standard model of sales and distribution.
BUT as a user and an Author I need to be able to pay one fee to my ISP and then be able to download whatever without any one bitching. I have said it a hundred times. Charge me 10 bucks a month and let me download. If I don't want to download then make it optional to silence the critics. I would gladly pay to download but I don't want to have to pay 50 different people to do it. I also don't want to hear about being sued and continue to be treated like a criminal. All it does is foster bad feeling like being part of the Inquisition and as a result I want to boycott every company involved. Sony on the shit list. Time Warner knows where to stick it. Anyone else want to try to sell me some more crap?

Rates

The proposal fails to take into account the price the middleman would ask. There have been many discussions here in the past about the disconnect between price and value. Take a look at the rates asked for internet radio stations, rates that far exceed the ability of the market to support.